Fun

Bitmex Charged With US Rules Violations — Owners Face Criminal Charges, Prison

News Feed - 2020-10-02 08:10:51

Bitmex Charged With US Rules Violations — Owners Face Criminal Charges, Prison


Cryptocurrency derivatives trading platform Bitmex has been charged with illegally operating in the U.S. Concurrently, its executives, including CEO Arthur Hayes, have been charged with violations of the Bank Secrecy Act and are facing prison sentences. One of the Bitmex founders has already been arrested.Bitmex and Owners Charged in US


Federal prosecutors and the Commodity Futures Trading Commission (CFTC) independently announced parallel actions against the cryptocurrency derivatives trading platform Bitmex and its owners on Thursday.


The CFTC has charged five entities and three individuals that own and operate Bitmex with “operating an unregistered trading platform and violating multiple CFTC regulations, including failing to implement required anti-money laundering [AML] procedures.”


The three Bitmex owners indicted are Arthur Hayes, 34, of Buffalo, New York, and Hong Kong; Ben Delo, 36, of the United Kingdom; and Samuel Reed, 31, of Massachusetts. The entities are HDR Global Trading Ltd., 100x Holding Ltd., ABS Global Trading Ltd., Shine Effort Inc. Ltd., and HDR Global Services (Bermuda) Ltd. (Bitmex).


The CFTC announcement details:The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution for the benefit of customers, permanent registration and trading bans, and a permanent injunction from future violations of the Commodity Exchange Act (CEA).


The CFTC complaint alleges that between at least November 2014 and the present, “Bitmex has illegally offered leveraged retail commodity transactions, futures, options, and swaps on cryptocurrencies including bitcoin, ether, and litecoin, allowing traders to use leverage of up to 100 to 1 when entering into transactions on its platform.”


During that time, the CFTC says that Bitmex facilitated cryptocurrency derivatives transactions worth trillions of dollars, earning more than $1 billion in fees. “Yet, as alleged in the complaint, Bitmex has failed to implement the most basic compliance procedures required of financial institutions that impact U.S. markets,” the agency claims.Violations of the Bank Secrecy Act


In addition, the U.S. Department of Justice (DOJ) announced Thursday that the U.S. Attorney for the District of New York has indicted Hayes, Delo, Reed, and Gregory Dwyer (37, of Australia and Bermuda) for “violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act.” Dwyer was Bitmex’s first employee and later its head of business development. Reed was arrested in Massachusetts Thursday morning while the other three remain at large.


The Justice Department alleges that the four knew they needed to implement AML and KYC (know-your-customers) measures since their crypto platform served U.S. customers. However, the company’s policies “were toothless or easily overridden to serve Bitmex’s bottom line goal of obtaining revenue through the U.S. market without regard to U.S. regulation,” the DOJ wrote. “Hayes, Delo, Reed, and Dwyer took affirmative steps purportedly designed to exempt BitMEX from the application of U.S. laws such as AML and KYC requirements,” the DOJ continued, adding:[The defendants] are each charged with one count of violating the Bank Secrecy Act, and one count of conspiring to violate the Bank Secrecy Act, each of which carries a maximum penalty of five years in prison.


The Justice Department notes that the maximum potential sentences are prescribed by Congress and individual sentencings will be determined by the judge.


Bitmex’s Response


Responding to the announcements by the CFTC and the DOJ, Bitmex issued a statement clarifying its position. Besides assuring its users that the platform is operating as normal, including withdrawals, and all funds are safe, the company affirmed:We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously.


“From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance,” Bitmex concluded.


What do you think about the charges against Bitmex and its owners? Let us know in the comments section below.ICO Aftermath: US Rules in Favour of SEC in $100M KIK Case – SALT to Reimburse Claimants From 2017 ICOREGULATION | 1 day agoNew Zealand Tax Agency Asks Crypto Firms to Hand Over Clients" Personal DataREGULATION | 3 days agoTags in this storyArthur Hayes, bitmex cftc, bitmex charges, bitmex doj, bitmex illegal, bitmex jail, bitmex usa


Image Credits: Shutterstock, Pixabay, Wiki CommonsSpot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here.Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.Read disclaimerShow comments

News Feed

Tezos NFT Market Hic et Nunc Returns After Founder Steps Back, Begins Transition to DAO
Tezos NFT Market Hic et Nunc Returns After Founder Steps Back, Begins Transition to DAO Last week, the popular Tezos-based non-fungible token (NFT) marketplace Hic et nunc disconti
Derek Andersen4 hours agoTerraform co-founder Shin blames protocol for collapse during trial in S. KoreaDaniel Shin claimed he and Do Kwon parted ways before the collapse of the Terra/Luna ecosystem was imminent and that
Scramble for Dollars: Emergency Cash Injections in $250 Trillion Global Debt Place the Fiat Ponzi On Ventilator
Scramble for Dollars: Emergency Cash Injections in $250 Trillion Global Debt Place the Fiat Ponzi On Ventilator The last few weeks of global hysteria has shown there’s been
France Approves First ICO
France Approves First ICO The French financial markets regulator, the Autorité des Marchés Financiers (AMF), has made its first initial coin offering (ICO) approval
Cryptocurrency Swap Not Banned in Iran, President’s Legal Team Says
Cryptocurrency Swap Not Banned in Iran, President’s Legal Team Says Current regulations do not prohibit the swapping of digital currencies, according to the Ir
$1.7 Billion in NFT Sales Fueled by Otherdeed Trades — NFT Volume Jumps 74% Higher Than Last Week
$1.7 Billion in NFT Sales Fueled by Otherdeed Trades — NFT Volume Jumps 74% Higher Than Last Week With the help of the Bored Ape Yacht Club’s Otherside land sale, non-fung
Spot Bitcoin ETF inflows surge, but BTC struggles to rally above $65K
Marcel Pechman1 hour agoSpot Bitcoin ETF inflows surge, but BTC struggles to rally above $65KArbitrage trading of the spot BTC ETFs and a drop in demand for inflation hedges could be limiting Bitcoin’s price upside.414
Ethereum Price Targets $3,000 As Analyst Calls It A ‘Powder Keg’
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Fed’s Brainard Calls for Sound Regulation of Crypto Financial System to Be Established ‘Now’
Fed"s Brainard Calls for Sound Regulation of Crypto Financial System to Be Established "Now" Federal Reserve Vice Chair Lael Brainard has stressed the importance of establishing so
Local Council Member in Ukraine Declares 124 BTC and 500 Tesla Shares
Local Council Member in Ukraine Declares 124 BTC and 500 Tesla Shares A government official in Rivne region of Ukraine owns close to $8 million in cryptocurrency and 500 Tesla shar
Ghost Town Vibes: Bitcoin Soars On ETFs, Not Users – Expert
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Billionaire Barry Sternlicht Warns of Hard Landing — Says ‘Economy Is Going to Implode’
Billionaire Barry Sternlicht Warns of Hard Landing — Says "Economy Is Going to Implode" Billionaire Barry Sternlicht, chairman and CEO of Starwood Capital Group, has warned that